Your State Capital Was the Place to Be
The energy in and around your state capitol building could not be denied last week as the doors opened wide for the beginning of the 2015 Legislative Session. As is usual, the first day was filled with all things “legislative,” as representatives, senators, cabinet members, Supreme Court justices, and of course, the floral array brought the pomp and circumstance we expect to see on opening day. We all know however, that the work of the 2015 legislative session began almost as soon as the 2014 session ended. To have a great state, we can never take our eyes of the ball that brings success and prosperity to our citizens. When business works engagingly with state policymakers, we all win. That is what we do at LMA, work to win. We were all over the State Capitol last week and plan to be there constantly throughout Session. We urge you to be involved in the legislative process and make a trip to the capital city when you can. In addition to your legislators setting state policy over the next 60 days, Tallahassee will be awash in warmer weather and intense spring colors courtesy of our dogwood trees and numerous species of azaleas. It will be great to see you so please let us know when you are coming. With this first of our weekly legislative publications, we update you below regarding movement of some of the bills we’re monitoring on your behalf:
Property & Casualty Insurance
(AKA Omnibus Insurance Bill)
CS/HB 165 by Rep. David Santiago (R-Volusia)
This non-controversial insurance bill revises about a dozen sections of the Florida Insurance Code was filed by its sponsor on January 5. It has successfully navigated its first committee of reference and barring any unforeseen issues, we expect this diverse insurance bill to be considered for third and final reading on the House floor in the near future. If successfully passed by the full House we’ll provide a more detailed analysis of its exact content in a future newsletter. Stay Tuned!
CS/SB 258 by Sen. Jeff Brandes (R-Pinellas) (Similar to CS/HB 165)
This bill, very similar to CS/HB 165, has passed two committees and is awaiting its 3rd and final committee stop in Senate Appropriations before it heads to the Senate floor.
Florida Insurance Guaranty Association
CS/HB 557 by Rep. Jake Raburn (R-Hillsborough) (Similar bill to SB 836)
Saying the third year is a charm after this bill’s previous two year journey, Rep. Jake Raburn (R-Hillsborough) did an extraordinary presentation in the House Insurance and Banking Subcommittee on 3/3/15, explaining that this is a compromise bill among all stakeholders who are involved when the Florida Insurance Guaranty Association (sort of the FDIC for insurance companies) needs insurance companies to assess its policyholders to pay claims for policyholders, in the unlikely event a property insurance company fails. Insurance companies by law are the collection agency for FIGA and are simply collecting needed dollars and turning right around and sending those dollars to FIGA when the Office of Insurance Regulation issues an order to do so. This bill does nothing to change that and keeps the FIGA provisions in the law with three exceptions: It more fairly distributes the assessments among all 6 million Florida property insurance policyholders; it relieves the Office of Insurance Regulation from having to review hundreds of rate filings for this administrative collection process and it eliminates the assessments from premium tax (a tax reduction) to make FIGA assessments consistent with those collected by the Cat Fund and Citizens.
SB 836 by Sen. Jack Latvala (R-Pinellas) (Similar bill to CS/HB 557)
This bill is scheduled to be considered in the Senate Banking and Insurance Committee meeting on Tuesday, 3/10/15. We will certainly be present and update you in our next newsletter.
Transportation Network Companies (TNCs)
CS/HB 757 by Rep. Bill Hager (R-Palm Beach) (Similar bill to SB 1298)
This bill establishes motor vehicle insurance requirements for transportation network companies & participating drivers; requires transportation network companies & insurers to cooperate with certain claims coverage investigations; and provides for application of certain coverage requirements. Originally filed by its sponsor on 2/16/15, the bill has successfully moved through its three committee stops and on 3/3/15 it was placed on first reading in the House. We expect the bill to be considered for third and final reading on the House floor in the near future. If passed by the full House and a like version by the Senate, the law changes would be effective 7/1/15, provided the Governor doesn’t veto the measure.
SB 1298 by Sen. David Simmons (R-Orange) (Similar bill to CS/HB 757)
This bill was filed by its sponsor on 2/25/15 and has been referred to three committees, including Senate Banking and Insurance. However, as of this
newsletter release the measure has not been scheduled for committee consideration.
CS/HB 817 by Rep. Matt Gaetz (R-Walton)
This bill which provides requirements for operating as a transportation network company or for employment as a transportation network company driver was placed on the House Transportation and Ports Subcommittee agenda for Tuesday, 3/10/15.
The similar bill, SB 1326 by Sen. Jeff Brandes (R-Pinellas) is not scheduled for committee consideration as of this newsletter release.
SB 1006 by Sen. Anitere Flores (R-Dade)
This bill is a complete reversal of the current depopulation process. Currently, the process is an “opt out” one where the Citizens policyholder must definitively sign and acknowledge they want to opt out of the takeout offer and therefore, they are able to stay in Citizens. Sen. Flores’ bill changes this to an “opt in” process where the Citizens policyholder must sign that they want to accept the takeout offer and that is the only way they are required to come out of Citizens. The bill further prohibits an insurer that removes a policy from annually increasing the rate for the renewal of a replacement policy by more than a specified amount for a specified number of terms. A little over 70% of the homeowners in Sen. Flores’ south Florida district have coverage through Citizens. This bill is not scheduled for a committee hearing as of this newsletter release.
The similar bill, HB 1087 by Rep. Michael Bileca (R-Broward) has not been referenced to any committees as of this newsletter release.
Assignment of Benefits (AOB) – No movement yet this session on this highly controversial topic.
HB 669 by Rep. John Tobia (R-Brevard); Similar bills SB 1064 by Sen. Dorothy Hukill (R-Volusia); SB 1210 by Sen. Alan Hays (R-Lake County)
The bills on this topic (referenced above) prohibit award of attorney fees in certain suits brought by third parties which is the holy grail of this debate – insurers contend AOB lawsuits are a litigation for profit scheme and water mitigation companies/the trial lawyer association say the suits keep insurers in line to pay what is rightfully owed via the AOB process.
Speaking of Assignment of Benefits…….
Industry blogger Scott Johnson recently exposed shocking statistics showing that Assignment of Benefits (AOB) may be the single greatest cost driver of Florida premiums; especially property premiums. His information was extracted from a searchable data base of lawsuits maintained by DFS. Would you believe there have been 92,521 AOB lawsuits in just the last two years? You won’t believe what else he found out! Read Scott’s blog “AOB…an ugly iceberg!” here:www.johnsonstrategiesllc.com
SB 1094 by Sen. Jeff Brandes (R-Pinellas)
This bill is a follow-up to Sen. Brandes’ successful legislation in 2014, SB 542, signed into law 6/5/14, continues the forward momentum established by Sen. Brandes in his attempt to bring a private, primary flood insurance market to Florida’s property owners. Sen. Brandes is an amazing visionary who never says we can’t do something – his belief is that if we as a state build it, insurers will come. The regulatory framework he establishes in this legislation and last year’s has consumer protections and all the makings for robust, free enterprise. The bill’s first hearing is Tuesday, 3/10/15 in Senate Banking and Insurance.
The similar bill HB 895 by Rep. Ahern (R-Pinellas County) is not scheduled for a hearing as of this newsletter release.
Quota Share Reinsurance-Citizens
SB 936 by Sen. Jeff Brandes
This measure establishes a program for private market insurers to remove risk from Citizens with Citizens serving as a reinsurer. The bill has received three committee references, the first being Senate Banking and Insurance. However, the committee has yet to place the measure on a meeting agenda.
HB 1307 by Rep. Dan Raulerson (R-Hillsborough)- This is an identical House companion to Sen. Brandes’ SB 936. HB 1307 is similarly positioned in that it has yet to be heard in any of its committees of reference.
Civil Remedies against Insurers
SB 1088 by Sen. Jeff Brandes
This measure requires an insured, a claimant, or a person acting on behalf of an insured’s or a claimant’s behalf, to provide an insurer with written notice of loss as a condition precedent to bringing a statutory or common law action for a third-party bad faith action for failure to settle an insurance claim; providing that an insurer is not liable for such claim if certain conditions are met.
HB 1197 co-sponsored by Rep. Mike Hill (R-Escambia/Santa Rosa) and Kathleen Passidomo (R-Collier) is a very similar House measure to Sen. Brandes’ SB 1088. Just like during the two previous sessions, efforts to amend the laws concerning alleged bad faith by insurers will become highly controversial and fought against hard by the plaintiffs trial bar. Both measures are awaiting their first committee hearings and we will keep you posted regarding developments.
Insurance Fraud Reform
SB 1306 by Sen. Rob Bradley (R-Clay)
This bill which is designed to better track incidences of fraud requires insurers to report data such as the insurers’ exposure for suspected fraud, how much may have been paid despite the fraud, and how much may have been recovered was referred to the Senate Banking and Insurance, Criminal Justice and Appropriations Committees. The measure has already garnered lots of attention, so we will be watching it very closely with a release of a new draft this week prior to its first committee stop.
The similar bill, HB 1127 by Rep. Jennifer Sullivan (R-Lake) is not scheduled for a hearing as of this newsletter release.
SB 1060 by Sen. David Simmons (R-Seminole/Volusia)
This bill provides that a specified restriction does not apply to the adoption of maximum reimbursement allowances approved by the three-member panel, and is on the Senate Banking and Insurance Committee agenda for Tuesday, 3/10/15.
The similar bill, HB 1013 by Rep. Bill Hager (R-Palm Beach) is not scheduled for a hearing as of this newsletter release.
Sinkhole Activity Damage Improvement
SB 404 by Sen. Wilton Simpson (R-Hernando)
This measure declares that there is a compelling state interest in enabling property owners to voluntarily finance certain improvements to property damaged by sinkhole activity with local government assistance; ads as a qualifying improvement the repair of sinkhole activity damage under Section 163.08, FS, Property Assessed Clean Energy financing mechanisms; and expands the definition of “blighted area” to include a substantial number or percentage of properties damaged by sinkhole activity which are not adequately repaired or stabilized. The bill is on the agenda and will be considered during the Senate Banking and Insurance Committee meeting tomorrow (Tuesday, 3/10/15).
Property Insurance Appraisal Umpires
HB 491 by Rep. Frank Artilies
Creates the property insurance appraisal umpire licensing program including continuing education and disciplinary processes under the auspices of the Department of Business & Professional Regulation. The bill has successfully navigated its committees of reference and is waiting to be scheduled for second reading by the entire House.
Similar Bill: SB 744 by Sen. Garrett Richter (R-Lee/Collier)- This highly similar measure to HB 491 is currently waiting to be heard in its first of three referenced committees.
Insurer Solvency Reform
SB 1190 by Sen. Tom Lee (R-Hillsborough)
This bill revises the amount of surplus that must be possessed by insurers applying for an original certificate of authority and to retain a certificate of authority. It also establishes penalties for domestic and mutual stock insurers that illegally pay dividends, and certain restrictions on premiums written. As of this edition of our newsletter the measure is waiting to be considered in its first of three committee references.
Identical Bill: HB 1085 by Rep. David Santiago (R-Volusia)- This measure is awaiting committee references and to be considered in its first committee.
Please be sure to watch the Cabinet meeting on Tuesday (3/10/15) if you can to hear the Cabinet’s continuing debate on the fate of certain agency heads, including Commissioner Kevin McCarty. It appears Commissioner McCarty has the support of most cabinet members and there will be further discussion about certain agency head’s performance measures and other features of each post under scrutiny: Banking Commissioner Drew Breakspear, Department of Revenue Director Marshall Stranburg, and Commissioner McCarty.
Insurance Committees in Action this Week
Both the House Banking & Insurance Subcommittee and Senate Banking & Insurance Committee will meet this week to consider a number of issues of interest. The House Subcommittee will meet on Tuesday (3/10/15) at 9:00 AM and thus far has a somewhat light agenda, scheduled to hear only two insurance-related bills. Click HERE to see the meeting agenda. The Senate Banking & Insurance Committee on the other hand has an extremely robust agenda for its meeting on Tuesday (3/10/15) at 1:30 PM and will consider nine to ten insurance bills. Click HERE to see the meeting agenda.
Don’t Get Used to Last Week’s Motion
While last week was more about speeches, greeting first time legislators, welcoming back last year’s bills that didn’t pass, introduction of new bills, and a bit of early posturing, we know this week will bring a quicker pace and much more “real work.” Sometimes it’s hard to believe that many bills/issues can move through this process in only 60 days. We look forward to the new leadership of Speaker of the House Steve Crisafulli and Senate President Any Gardiner. Both of these leaders have awesome responsibilities, and we will do all we can to make sure they are successful in bringing good policy to our Florida citizens.
As always, Lisa and LMA Team